The 'scariest charts in the world' and the dearth of deep-value plays

The Nasdaq hit a speed bump on the road back to dot-com highs, stumbling through its biggest decline since July to start the week. That's probably just a taste of the volatility to come in the next few days.

The fun is just beginning. Chain-smoking, Scotch-guzzling fun.

Investors are clearly girding for some rare ugliness by moving away from the stocks poised to suffer most when the inevitable drop arrives. You can tell by the fact that almost half of the stocks in the Nasdaq are in bear markets, which is to say they're down at least 20% from their peak in the past year, according to Bloomberg.

The S&P, however, has less than 6% of companies in this position.

You don't want a home built on landfill in San Francisco, and you don't want to be overexposed to techs during broad-market corrections. Of course, both can pay off, so plenty will continue to pay insane prices to live in the Marina, and plenty more will keep chasing huge returns regardless of the warning signs.

Then there are those bottom fishers scraping around in search of true value stocks. Not a bad approach during times like these. Problem is, they almost don't exist, at least by one measure put forth by Millennial Invest's Patrick O'Shaughnessy.

The metric is the ratio of EBITDA to enterprise value. If you just bought the 10% of stocks with the cheapest ratio on an annual basis, you'd have crushed the market by more than 5% a year, over the past half century. As you can tell by the chart, stocks trading at these levels are difficult to come by. Read his whole post.

"This bull market has left us with a very homogenous market where valuations are clustered around the mean," O'Shaughnessy said. "The sad fact is that in 2014, it's hard out there for a deep-value investor."

Key market gauges: No big swings premarket, with futures on the Dow and the S&P teetering south. Asia closed down across the major indexes,while Europe is the one to watch as Scotland's fate is determined this week.

The quote of the day:"This time around, the crash and its byproducts will be more extreme than in 1929, as the bubble itself is more extreme. The aftermath will be more extreme, as -- unlike in 1929, when most people actually believed in the government -- this time around, there will be dramatic unrest." -- Jeff Thomas, joining the chorus of doomsday crooners on the International Man blog.

The economy:The two-day Federal Reserve meeting kicks off today, but we won't hear the details until later on tomorrow. Producer-prices for August rose 1.8%,

Deal news sent shares of Glimcher Realty up 30% in premarket. Washington Prime Group is buying Glimcher in a $4.3 billion cash-and-stock deal.

Elon Musk says Tesla is a little pricey. Morgan Stanley agrees. So do investors, who took the stock down 9% yesterday. Shares are trying to make a comeback premarket, but are gaining just a little bit of traction, helped by this analyst who says "buy!". Bespoke pointed out that not only was Tesla one of the hardest-hit stocks of the day, so was SolarCity , another Musk company. Coincidence?

Don't kick yourself too hard if you don't play it just right. Even Harvard's top fund manager has had her share of missteps, but she won't have many more.

The charts of the day: Erico Matias Tavares of Sinclair & Co. called these the "two scariest charts in the world." They don't need much explanation. "The average world citizen is getting dumber while our means of doing harm are increasing," he said. "This trend is clearly not our friend." Read his full post (h/t Zero Hedge).

World IQ over time

Military expenditures

The call of the day: The Scottish referendum is stealing the European headlines this week, but there's also the matter of the ECB's TLTRO program, which is aimed at stimulating lending to euro-zone households. We should see the first results this week, as Cam Hui of the Humble Student of the Markets blog points out, and we could start seeing a boost to the region's small caps. They've been struggling like their U.S. counterparts, but this could change things, Hui said.

The Wisdom Tree Europe Small Cap Dividend Fund is one way to play the potential reversal. Others from iShares include the MSCI EAFE Small-Cap and the United Kingdom Small Cap ETFs .

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your e-mail box. Be sure to check the Need to Know item. The e-mailed version will be sent out at about 7 a.m. Eastern.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.